What happens if Aerus offsets against the Security Deposit?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
We or our affiliate will hold the Security Deposit as security against all monies that you owe us or our affiliates, including payment of all fees due and debts incurred under the Franchise Agreement (including your indemnification obligations). We or our affiliates may offset against the Security Deposit all monies that you owe to us or our affiliates. We will provide you notice of any offsets made. If such an offset is made, you must immediately replenish the Security Deposit. We have no obligation to maintain the Security Deposit in a separate account, and we may co-mingle the Security Deposit with any of our accounts or funds. You are not entitled to any interest on the Security Deposit. You may need to increase the Security Deposit from time to time depending on your inventory requirements for Consigned Products. If the Standard Allocation for any Consigned Product in your possession increases, you may be required to increase the amount of your Security Deposit.
Source: Item 5 — Initial Fees (FDD pages 17–20)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, Aerus or its affiliates can use the security deposit to cover any money owed to them by the franchisee. This includes fees, debts, and indemnification obligations under the Franchise Agreement.
If Aerus offsets against the security deposit, they will provide the franchisee with a notice of the offset. After receiving this notice, the franchisee is required to immediately replenish the security deposit back to its original amount. This ensures that Aerus always has the full security deposit available to cover potential future obligations.
The security deposit does not earn any interest for the franchisee, and Aerus is not obligated to keep it in a separate account. Aerus can co-mingle the security deposit with their other funds. Furthermore, the franchisee may need to increase the security deposit if their inventory requirements for consigned products increase, specifically if the Standard Allocation for any consigned product in their possession increases.